What makes a healthy supply chain?
Most of the organizations we spoke to highlighted the importance of identifying and building trusted relationships with key suppliers as a means of maximizing goodwill and flexibility, as well as shoring up long-term sourcing, and mitigating risks. During the pandemic, these long-term relationships as well as on-the-ground proximity to the suppliers helped contain the immediate impact of disruption. Says Johanna Bröll, Head of Procurement Financial Contribution at a multinational science and technology company, “When masks were not available to buy here, we were able to access these as we had people in the sourcing teams in Asia who were close to the suppliers. If we’d been trying to solve the issue from Europe, that wouldn’t have been so easy."
When masks were not available to buy here, we were able to access these as we had people in the sourcing teams in Asia who were close to the suppliers. If we’d been trying to solve the issue from Europe, that wouldn’t have been so easy.
Head of Procurement Financial Contribution | Multinational science and technology company
For Andy Boadu, Manager of Supply Chain Continuous Improvement at the world’s largest gold mining company, Newmont Corporation, a healthy supply chain depends on recognizing the value of all sizes of supplier, and proactively supports them whatever possible.
“Approaches [to maintaining a healthy supply chain] must involve an intentional effort to support businesses, both small and large,” he says. “Newmont’s suppliers range from huge international players to very small local suppliers, and we intentionally invest in these companies - whether through training and development, or being flexible when conditions require it. Before COVID-19, all our small companies were paid on a 30-day payment term. But during the challenges of the pandemic we moved to 10-day terms, to ensure they’re getting their money back earlier.”
Andy, based in the Greater Toronto area of Canada, is responsible for driving innovation across the supply chain. His remit covers inventory, materials management, warehouse governance, sourcing and procurement, and logistics. He recognizes that being smarter about working capital management is key to ensuring supply chains are fit for the future. Having end-to-end visibility plays an important role.
“A healthy supply chain is an efficient one where the end-to-end process is clearly defined,” Andy notes. “Everyone knows the role they have to play within the process and when. When payment is made by the AP team, everyone across the chain should know the role they have to play. If there’s a delay at any point, it will affect the rest of the process. So it's important to be aware of any bottlenecks and be able to manage them.”
Newmont’s approach here includes building strategic relationships not just with suppliers, but also with the requesters/end users of its products - and improving systems to improve interconnections and the line of sight from one end to the other.
“The goal is to optimize our Request to Pay process,” Andy explains. “We want to make sure that we have one streamlined activity where everyone from our vendors to our warehouse team are all connected across the process.”
The goal is to optimize our Request to Pay process, we want to make sure that we have one streamlined activity where everyone from our vendors to our warehouse team are all connected across the process.